Adversary Proceedings

Dedicated Bankruptcy Lawyers for Businesses Near Aventura

The bankruptcy process can be long and cumbersome if you lack capable legal representation. Adversary proceedings can create a number of hindrances to successfully emerging from your financial troubles, but they can also be used as a tool to protect certain debtor and creditor rights. At Stok Folk + Kon, our dynamic bankruptcy attorneys have helped countless clients near Aventura safeguard their interests in adversary proceedings. We understand the complexities of bankruptcy law and can help you pursue a favorable outcome for your business.

The Role of Adversary Proceedings

There are numerous situations in which an adversary proceeding may be filed. This term refers to a separate lawsuit that addresses a dispute concerning a debt listed on the bankruptcy petition. In most instances, a case will get to the discharge stage without any issues. However, in other situations a creditor, a trustee, or the debtor may file a lawsuit to challenge a particular aspect of the bankruptcy.

For example, a creditor might bring an adversary proceeding to challenge the fraudulent discharge of a specific debt. If it successfully proves its claims, the court will make the debt non-dischargeable. If this happens, the debtor will be personally liable for the debt even after receiving a bankruptcy discharge.

In another instance, a trustee might file a lawsuit to regain valuable property that the debtor sold immediately prior to the bankruptcy to keep it from the reach of creditors. In order to get the transferred property back, the trustee would need to establish actual or constructive fraud. Conversely, it could request a hearing to take money or property back from a creditor. The trustee can also initiate an adversary proceeding if bankruptcy laws and procedures are not being properly followed.

A debtor may use this tool for two main reasons. First, it may initiate an adversary proceeding to get rid of a junior lien. Second, a debtor can take this step if a creditor fails to respect an automatic stay or ignores the result of bankruptcy. This usually happens in situation when the creditor continues its collection activities after a petition has been filed or a debt has been discharged.

Just as with any other legal conflict, the party seeking relief is required to file a complaint in court and serve the defendant, which must respond within a certain amount of time and address the allegations. If the defendant fails to respond within the mandated time frame, the court will enter a default judgment in favor of the plaintiff. Each complaint is different but typically must include information regarding each party, the facts of the situation and the specific allegations against the defendant, the jurisdiction that governs the case, and the remedy requested from the court.

Consult an Aventura Attorney for Your Bankruptcy Issue

Understanding how and when an adversarial proceeding might be a good option is important to identifying foreseeable difficulties as well as stopping abuses of the bankruptcy process. The experienced commercial bankruptcy lawyers at Stok Folk + Kon will work diligently to help protect your assets. We understand the toll that financial stress can exact on your business, which is why we are dedicated to assisting you in emerging from it. We proudly represent clients in Hollywood and Fort Lauderdale as well as throughout the rest of Florida. To learn more about your legal rights and options, do not hesitate to call us today at 305-935-4440 or contact us online to set up a consultation.